KPI Performance Measures and The Learning Organization

by Lily White
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A learning organization is one in which purposeful systematic and ongoing learning is an integral part of a continuous improvement system and a major contributor to a sustainable competitive advantage. All organizations utilize inputs such as money, material, machinery, information, and of course, people to achieve their outputs. All of those inputs, with the exception of people, are equally available to all competitors in a single market. What differentiates the more successful organizations is the quality of the people. It is the people and how they work together to process inputs into value-added outputs or services that is the key to sustained success. The key is to track this through objective and accurate measures and set key performance indicators (kpi) to track progress or otherwise.

In the absence of major technological, financial or organizational restructuring, the most direct route to continuous improvement is for teams within organizations to continuously learn together. Confusion over this concept can lead to misunderstanding between managers and trainers, especially when the perennial issue of training evaluation is up for discussion. Some of this confusion is caused by the different ways a manager and a trainer would view the role of training. Trainers see their role as delivering up trained people, or closing skills gaps. The more the better. Some trainers go to extraordinary lengths to show that their trainees have enjoyed the training and have learnt what they have been taught. The better trainers try to show a link between their training, behavior change and organization performance.

The managers take a different view. They don’t care much whether the trainees have learnt what they have been taught. What counts to the managers is not what people learn, but what they DO with what they learn. If the manager can’t see what the trainees are doing differently in the context of outputs, measures and targets, then all the evaluation techniques in the world aren’t going to prove that the trainers are earning their money. Taking the broader view that the manager needs performance, not just training, makes the line manager more demanding. Managers are constantly weighing the anticipated benefits from training against the cost, as well as the potential returns on alternative ways of spending this money. Yet the return on investment on capital invested in training and development can be huge, as anyone who has invested in their own training, learnt a trade, or attended a tertiary institution, instinctively knows. This is why the measurement of any benefit from training is vital, the kpi process can keep people on track, keep them motivated, keep the training coming if it is delivering improving results.

If organizations were to define specifically the outputs required by internal or external customers, how those outputs were to be measured, and what standards or targets are acceptable, then exact training requirements could be defined in performance terms. Training programs, which are generally very expensive, could then be finely focused on identified outputs and performance requirements. This common ground between trainers and managers could form the bedrock on which the learning organization is established.

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